Wales bucks the house value trend

It seems that while house prices stagnate or fall around the UK, in one part of the country, the housing boom is still in full swing.

There are, of course, many factors that go in to increasing the value of a property and many homeowners will start by improving the curb appeal by adding a conservatory or installing DIY Shutters. However, the single most important factor in house value remains location, and right now, the place to be is Wales.

According to the Your Move index, house prices in Monmouthshire increased by 11.3% to the end of March 2018, while prices were in decline elsewhere, particularly in London. The same survey found that house values in the City of London were down by a massive 31.4%, while Southwark also saw a big fall of 17.5% in the previous year and 6.1% in the month of March alone. Meanwhile the UK as a whole saw a 0.1% decline in house prices in March, the third successive month of falling prices.

The one part of the UK to defy the trend was Wales. Home values in Cardiff and Swansea rose by 9.7%, while the Vale of Glamorgan saw a 10.2% rise and Torfaen enjoyed a 10.4% increase on the year.

However, while this boom in house prices may be driven partly by the desirability of Wales as a location to set up home, it has also been influenced by tax changes. In April, the Welsh Government introduced a new land tax, which starts at a higher base than in England but is paid at a higher rate. As a result, it is believed that home buyers looking to purchase high-value properties brought their plans forward ahead of April, just as they did two years ago when stamp duty was increased.

It is likely that this boom in Welsh property prices could be short-lived and that Wales could follow suit with the rest of the UK as 2018 draws on. Beyond London, other areas of the UK that saw price falls were Maidenhead and Windsor, where prices dropped by over 9% in the previous year, though this is an area that has the highest average house price outside London – currently £542,285.

There may be some hope for Welsh property values in the future, however. The data indicates that different markets in the UK are operating at different speeds, and while there is a consistent trend for house-buying activity and house prices to fall across the UK, there is some scope for certain areas to continue to buck the trend. First-time buyers may welcome the decline in house prices, of course, but Welsh homeowners will presumably be hoping that the dramatic increase in property values over the last year is not just a blip after all.